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March 16, 2009

To Bail or Not To Bail on Your Home?

If the value of your home is less than the amount of your mortgage does it make sense to keep making your payments or should you just walk away? If you can't get the bank to reduce the principal of your loan, what should you do? Well, no one can tell you that because every situation is different, but, as The Times points out this weekend, the penalties for defaulting on your mortgage may not be as onerous as they once were. First of all, more and more banks and saying OK to short sales, in which the owner sells the house for less than the value of the mortgage; secondly, even if you go into foreclosure, the bank is unlikely to chase you down to make up the difference between the sales price and the mortgage amount. If the lender does forgive some piece of your debt, however, some states will still try to treat the forgiven debt as taxable income. Lastly, some legal experts expect that the credit rating agencies won't hit you as hard for a foreclosure now as they might have in the past. “It just seems obvious that a foreclosure in 2008 or 2009 doesn’t have as much information value as a foreclosure five years ago,” said legal prof Todd J. Zywicki. Are any readers currently underwater and considering voluntarily bailing on their home?
Thoughts on Walking Away From Your Home Loan [NY Times]
Photo by Jennscrzy

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Comments

I'm guessing Sebb is.

Posted by: dittoburg at March 16, 2009 9:05 AM

I'd be interested in a real-life example or a knowledgable comment as to what this ACTUALLY would do to someone's credit score. If it was already tenuous in the, say 500-700 range and it got pushed to 300-400 because of that, they'd have a hard time even finding someone to rent them an apartment.

Posted by: daveinbedstuy at March 16, 2009 9:07 AM

"Every now and then the world is visited by one of these delusive seasons, when 'the credit system' ... expands to full luxuriance: everyone trusts everybody; a bad debt is a thing unheard of; the broad way to certain and sudden wealth lies plain and open; and men ... dash forth boldly from the facility of borrowing.

"Promissory notes, interchanged between scheming individuals, are liberally discounted at the banks.... Everyone talks in [huge amounts]; nothing is heard but gigantic operations in trade; great purchases and sales of real property, and immense sums [are] made at every transfer. All, to be sure, as yet exists in promise; but the believer in promises calculates the aggregate as solid capital....

"Speculative and dreaming ... men ... relate their dreams and projects to the ignorant and credulous, dazzle them with golden visions, and set them maddening after shadows. The example of one stimulates another; speculation rises on speculation; bubble rises on bubble....

"Speculation ... casts contempt upon all its sober realities. It renders the [financier] a magician, and the [stock] exchange a region of enchantment.... No 'operation' is thought worthy of attention that does not double or treble the investment. No business is worth following that does not promise an immediate fortune....

"Could this delusion always last, life ... would indeed be a golden dream; but [the delusion] is as short as it is brilliant."[1]

Washington Irving in the "Crayon Papers" about the Mississippi Bubble fiasco of 1719.

Posted by: daveinbedstuy at March 16, 2009 9:14 AM

dittoburg : Why would i walk away from my homes? I guess you forgot to read the Douglas Eliman report. Brownstones are still going up !

Posted by: sebb at March 16, 2009 9:21 AM

sebb....even I don't believe that!!!!!

Posted by: daveinbedstuy at March 16, 2009 9:23 AM

Please don't shoot me for what is likely a really dumb question: This whole thing of owing more on the home than it's currently worth - this generally pertains to those who recently bought a home right? Or those who recently took out a large home equity loan? Or, are there other situations I'm not thinking of?

Posted by: InsertSnappyNameHere at March 16, 2009 9:25 AM

I don't get it...
... values go up and down, why would someone intentionally walk away from their home? It may be worth less today, but what about a year, 5 years, etc?

I think the only people seriously considering this were the speculators or the people who couldn't afford the home in the first place. Otherwise, regardless of the value it is your home and a place you, at least in my opinion, would have planned to stay in for a long time, regardless of intermittent shifts in value.

I think this mentality of "well I guess I'll just bail 'cause foreclosure isn't that bad anymore" is the same mentality that got us in to this problem in the first place.

.02

Posted by: christopher at March 16, 2009 9:26 AM

Yes, Snappy that would be it. It usually starts with a very high Loan-To-Value Ratio of say, 90-100%. There were Equity Lines of Credit being given out where you could actually get more than the appraised value (minus of course any existing mortgage debt).

Posted by: daveinbedstuy at March 16, 2009 9:28 AM

Thanks, Dave. Next question: Why would any bank allow a loan to go through that is more than the appraised value of the home? What does the bank stand to gain by taking (what seems to me) to be a big risk like that?

Posted by: InsertSnappyNameHere at March 16, 2009 9:31 AM

I find this argument so pointless. Almost anything we buy is worth less as soon as we buy it--your car, your clothes, your food. Yet we don't walk away from these purchases, we pay for them and use them as we intended.

The same should be true of your home. I bought mine so I could have a place to live, not to improve my balance sheet.

At least our homes have a chance (as slim as it appears these days) to be worth more than we paid for them.

Posted by: curiositykilledthecat at March 16, 2009 9:32 AM

That, Snappy, is the $64,000 question. But they did it.

Posted by: daveinbedstuy at March 16, 2009 9:33 AM

curiosity.... I think this is really a situation where the homeowner cannot afford to make the payments anymore for whatever reason. You're right, people in "normal" circumstances don't pursue this strategy as a way of getting out of some negative equity...that's just ridiculous.

Posted by: daveinbedstuy at March 16, 2009 9:38 AM

As Christopher said, I don't see too many people walking away here unless they were speculators. With a nod to Luther Vandross, a house is also a home. It's not like walking away from a bad stock investment, or stake in a gold mine in the Andes. Most people live in their most expensive investment, and in this city and environs, you'd have to have some serious bucks to rent almost anywhere, and if you had the money to do that, you probably aren't in the position of losing your home to foreclosure.

Most people with families, ties to the community and serious sweat equity and emotional investment in their homes are not going to walk away, unless in the most dire of circumstances. Most people will buck up and weather the storm, and will be just fine in the long run. Especially here in brownstone and historic Brooklyn.

Posted by: Montrose Morris at March 16, 2009 9:40 AM

I'll tell you a story that I saw over the weekend that was astounding....This beutiful stone home with a number of large stone outbuildings in Bucks Countywas purchased about 4 years ago for $800,000 and completely rehabbed...It has been on the marke for maybe 6-9 months at $2.65 MM. I drove in to show it to someone over theweekend and there's a "Sherriff's Sale" poster up on the window.

Posted by: daveinbedstuy at March 16, 2009 9:51 AM

Sebb - glad to hear you're still around. You'd been too quiet for a bit.

Posted by: dittoburg at March 16, 2009 9:59 AM

DIBS that sounds great - how old was the place? I love stone buildings.

Posted by: dittoburg at March 16, 2009 10:00 AM

early 1800s, ditto. Looks like it might have had about 5 acres. I was looking for the listing but its gone.

Posted by: daveinbedstuy at March 16, 2009 10:03 AM

One critical factor missing from the equation is - you need to live somewhere - so if you walk away how much less can will you spend to live in comparable housing (this is assuming you actually can afford to make your payments)

Posted by: fsrg at March 16, 2009 10:11 AM

ditto, sorry for the off-topic, but speaking of stone buildings, did you ever see the gingerbread house in Bay Ridge that we've discussed here before?

http://z.about.com/d/brooklyn/1/0/m/1/-/-/DSCF0303.JPG

http://tinyurl.com/dfwvvg

Posted by: Biff Champion at March 16, 2009 10:13 AM

I love Bucks County- one of my relatives had a place in New Hope. He bought before it became popular and that was the first place I ever fell in love with.

I agree with Montrose, though. Although to hear talk on b'stoner it sometimes seems no one bought their house as a home, but only as an investment. I think most homeowners will hold on too, and it will be mostly those who no longer can afford it who will bailout, from necessity. It would be shortsighted for anyone to walk away from their home because the value has fallen- the bricks are still the same, the streets, the neighbors, - values rise and fall. Walk away from the house and you lose everything, not just dollar value.

So Is there some big advantage the bank gets if they allow this? Or are they simply bending to the reality?

Posted by: bxgrl at March 16, 2009 10:16 AM

here's the listing. it looks like the broker's website is experienv=cing problems loading the pics though....

http://www.addisonwolfe.com/listing/index.html?id=5339076&next=%2Flistings.html%3Faction%3Dd

Posted by: daveinbedstuy at March 16, 2009 10:18 AM

I guess this is where it really confuses me- if you can afford your payments, even if the value of the haouse has fallen, what advantage is there to walking away from your mortgage?

Posted by: bxgrl at March 16, 2009 10:19 AM

None, bxgrl. In addition you're likely to ruin your credit score despite what the article alludes to.

Posted by: daveinbedstuy at March 16, 2009 10:21 AM

Wrong photo.

***Bid half off peak comps***

Posted by: Brownstones Half Off at March 16, 2009 10:34 AM

I've said it before. The "value" of your home really means noting until you go to sell it. The day you put it on the market and accept a sales offer is the day you find out it's true value.

It's like holding stock. The prices rise and fall but you don't gain or lose any money until you sell it. That's when it matters.

The only caveats I can think of is if you're trying to refinance a mortgage or taking out a loan.

Homes almost always do well long term. Oh yeah, they're also a good place to call home (lest we forget).

Posted by: TownhouseLady at March 16, 2009 10:34 AM

All of you guys are commenting as if the theoretical person is employed and healthy. The person who walks away from their home is unemployed and/or uninsured and can't make payments on their home and can't sell it for what they owe.

You know - not everyone losing their home is some sort of greedy a**h**** who bought a house they coulnd't afford. If you lose your job and your house goes down 50% in value, it doesn't matter if you put 40% down. And don't forget - over half of bankruptcies in this country are the result of medical costs after a severe illness/injury.

Posted by: Rookie at March 16, 2009 10:39 AM

I agree with DIBS about the credit score. the article brushes it off but I find it hard to believe that there will be no consequences in the future if you default now.

2,5, 10 years, whatever it may be, that you decide you want to own again, I'd think any potential lender would look at your history and be wary of someone who walked away from a mortgage at the first since of fiscal crisis.

No matter what the article says, I don't accept the notion walking away from a mortgage will no have long term ill effects.

Posted by: christopher at March 16, 2009 10:39 AM

bxgrl: Depends on the house and depends on the payments. Take yourself out of Brooklyn for a moment and consider someone who got caught up in McMansion hype somewhere out there in America. Picture a 7,000 square foot home that was built almost overnight on a half acre in some soulless subdivision. Massive heating bill. Massive cooling bill. Lawn care expenses. Shoddy construction already showing its ugly face. Maybe the owner is still comfortably employed and can afford the mortgage, but he put 5% down when he bought the place for over a million bucks in 2005 and now he is several hundred thousand dollars underwater. He can keep making those payments for something he bitterly regrets buying, or he can walk away from the equity he doesn't have and start again.

What would you do?

Posted by: lechacal at March 16, 2009 10:39 AM

you have it lucky over here. Hand the keys back and walk away.

In the UK, the bank will sell your house at auction to the highest bidder and can pursue you for the difference up to 12 years later.

Posted by: the chicken at March 16, 2009 10:42 AM

lechecal,

I understand what you're saying but wouldn't it be better to hold an auction take somewhat of a financial hit but avoid the mar on your credit?

Posted by: TownhouseLady at March 16, 2009 10:45 AM

Chicken: same here, more or less (though it varies by state). But there are practical limitations to a bank's ability and willingness to keep going after a defaulting borrower for the deficit after a foreclosure sale. Most mortgage borrowing in the United States is *not* non-recourse, regardless of what many owners seem to think. If the bank isn't made whole by the foreclosure sale, they generally can go after you for the deficit. Again, whether they choose to do so is a different matter.

Posted by: lechacal at March 16, 2009 10:46 AM

I share Bxgrl's confusion ["if you can afford your payments, even if the value of the house has fallen, what advantage is there to walking away from your mortgage?"].

Even if the value of your house falls, it presumably retains it's functional value. IMO the idea of a house as an investment is fundamentally flawed. That's not to say that it's value appreciating isn't great, but a fall in value isn't the same as the house collapsing or becoming otherwise unhabitable.

Posted by: Bob Marvin at March 16, 2009 10:46 AM

townhouselady: How would an auction help my imaginary McMansion owner? Assuming the auction would net him several hundred thousand less than he owes on his mortgage, he would still have a choice of either paying that amount out of his pocket or defaulting on the loan (unless the bank agrees to a short sale, but that will hit his credit too). Am I missing something?

Posted by: lechacal at March 16, 2009 10:48 AM

"It's like holding stock. The prices rise and fall but you don't gain or lose any money until you sell it."

Or bankruptcy or Obama wipes you out. Hello General Motors!

***Bid half off peak comps***

Posted by: Brownstones Half Off at March 16, 2009 10:48 AM

really Lechacal? I thought it was just hand the keys back and walk away. This one of the key differences I was told between the UK and US - here you can start over again as many times as you want until you succeed, there you fail once and branded for life.

A lot of people in the UK thought it was that way after the 1980's housing crash and walked away only to be tracked down 10 years later once things had picked up again and they were back on their feet.

Posted by: the chicken at March 16, 2009 10:50 AM

BobMarvin: Your fundamental assumption is that the owner still considers the home to be worth the mortgage payments and maintenance costs. That assumption is wrong is many cases (perhaps in the case of my imaginary McMansion owner). Sometimes it just isn't worth it to keep writing the checks. Sometimes it's just a box of tulip bulbs that you are forced to sleep in at night.

Posted by: lechacal at March 16, 2009 10:51 AM

DIBS - not entirely true - if you can 'walk away' and get (either rent or buy) a comparable home for significantly less it MAY make sense to dump it - this is likely not the case anywhere in the Northeast where values have not declined enough to make this arbitrage pay but there are places in Fla and CA where it might - and while I agree your credit score is going to be destroyed, in terms of certain things like renting or car purchases the desperation of the rentor/sellor will likely result in over looking low scores to see if a one-time default is truly indicative of a deadbeat or just unusual circumstances - it already happens with student loans - which so many people fail to pay that private businesses often overlook it. Dont expect to qualify for a low-interest credit card this decade.

Posted by: fsrg at March 16, 2009 10:52 AM

Chicken: Yeah, really, more or less. Practice varies by state and the documents for your loan, but that's the general rule on this side of the pond. Many homeowners don't understand this.

Posted by: lechacal at March 16, 2009 10:53 AM

fsrq, I understand the walkaway maths but what bank in their right mind would be willing to lend you money to buy another house knowing that you have just stiffed another bank on the house you walked away from?

Posted by: the chicken at March 16, 2009 10:59 AM

True enough lechacal, but your "imaginary McMansion owner" pitiable that he may be, doesn't have much relevance for brownstone Brooklyn. [Well, maybe some relevance for shoddy condo owners who IMO are not really part of brownstone Brooklyn, despite their physical location].

Posted by: Bob Marvin at March 16, 2009 11:01 AM

dittoburg: I am around but i don't want to sound like a broken record.
daveinbedstuy : I still believe we will hold much better than the rest of America.

Posted by: sebb at March 16, 2009 11:02 AM

"[Well, maybe some relevance for shoddy condo owners who IMO are not really part of brownstone Brooklyn, despite their physical location]."

Thank you. Someone finally says it.

Posted by: daveinbedstuy at March 16, 2009 11:03 AM

I agree, sebb.

Posted by: daveinbedstuy at March 16, 2009 11:04 AM

lechacal- but don't you think there is a differnece between a realistic house buy and a McMansion buy? Those houses were stupidity from the foundation up- but they don't make up the majority of the market and actually i wouldn't walk away from my McMansion because I would never buy one of those :-). I do see your point though- but how do you think that relates to someone who was more realistic and bought a good, solid, affordable house in a good community to raise a family in? My thought on McMansions is that they are vanity purchases and pretty much the architectural rendition of the MREB.

Posted by: bxgrl at March 16, 2009 11:08 AM

Well, I guess it once again boils down to don't buy something you can't easily afford.

Everyone's going to have to get used to the fact that credit isn't magic. You DO have to pay back what you borrow or suffer the consequences.

Posted by: TownhouseLady at March 16, 2009 11:08 AM

Bob: And that's why I took us out of Brooklyn and out into America for that little mental exercise. Now that you see why walking away might make sense for some homeowners, consider whether there might be some homeowners in Brooklyn, even in prime places like Park Slope, where someone who can afford the payments decides just to walk away. I would say it's currently very unlikely for someone who put down 20% (which is one of the many reasons why strict coop down payment requirements are good for shareholders), but what about someone who put down 10% on a new condo development? People are already walking away from big deposits, so why would someone not also walk away from a deed? I would rather not pick a specific address to discuss, but I can think of several recent developments in Park Slope that are at risk.

Posted by: lechacal at March 16, 2009 11:09 AM

chicken - likely none - I am not figuring you are getting a [large] bank loan for your next home - it will either have to be a rental, a non-bank mortgage or some crazy situation where a small bank-like entity is willing to have you take the home b/c you have income and they'd otherwise be left with an abandoned structure.......in times like these - desperate- people/businesses are often willing to accept things they'd never never do otherwise.

DIBS & Bob - all your bitching about shadows, ugly architecture and the like seem to defy your proclamation that condos are not part of brownstone brooklyn.....

Posted by: fsrg at March 16, 2009 11:09 AM

"don't you think there is a differnece between a realistic house buy and a McMansion buy"

Of course I do. And to be clear, I agree with others that this discussion has much less relevance to brownstone Brooklyn than to suburban America. I just don't see many people walking away from their homes in Brooklyn no matter how much prices drop. Except for some subprime borrowers and people who bought into new condos, I just don't think it's going to happen on a large scale.

Posted by: lechacal at March 16, 2009 11:13 AM

Wow the retards still don't "get it". We are in a negative feedback loop! The appeal of owning a house is so '05 and more and more people are servicing debt on a depreciating asset. With job losses and the collapse of the Mutant Asset Bubble people will not walk away, they will stop paying the mortgage and just live in the house.

By the way The new rules allow a Bankruptcy Judge to do a "Cram Down" in a BK proceeding. How long before rates start to go up because Banks are pricing in risk?

Mutant Asset Bubble=DEAD.....

The What

Someday this war is gonna end...

Posted by: Return of The What at March 16, 2009 11:15 AM

Bxgirl - and the rest of you snobs - your "McMansion" is often (and probably a majority by population) - someone elses good solid home in a good community.....

Certainly "McMansions" are often in low-crime districts with excellent PUBLIC schools and the architechture and land of it seems to appeal to more Americans then living in a narrow row house with virtually no outdoor space. Further I am willing to be anyone a substantial amount of money that the cost to maintain the physical structure (not landscaping, heating, electric) in the 1st 10years of ownership is cheaper for a brand new "McMansion" then the average Brownstone in Brownstone Brooklyn.

If you are going to talk about economics try not to let your own biases so cloud reality as to make your points ridiculous.

Posted by: fsrg at March 16, 2009 11:16 AM

I'm hardly a snob, fsrq. I was responding to the way lechacal phrased the question but that said, McMansions are still POS's. You seem awfully touchy about it- did you buy one and now you have to walk away? How about making your pooint without sounding like a jerk (if that's possible.)

Posted by: bxgrl at March 16, 2009 11:24 AM

Bxgirl - if you call one of the most common and popular housing types in the country (I am presuming you are calling a larger than average single family non-attached house in a subdivision a "McMansion") - "stupidity from the ground up" then you are in fact a snob - a housing snob.

snob - a person who believes himself or herself an expert or connoisseur in a given field and is condescending toward or disdainful of those who hold other opinions or have different tastes regarding this field

No I have not and have never owned (or rented) a home outside of the downtown Brooklyn area in my entire life. But I am not so blind to reality to see that the economic factors that face someone in an underwater house do not change all that much if the house was built 5 years ago with sheetrock or 150yrs ago with plaster. Except that the upkeep will likely be higher for the older structure.

Posted by: fsrg at March 16, 2009 11:58 AM

I'm curious how these new condos, despite being in brownstone Brooklyn, are not "part" of brownstone Brooklyn.

Posted by: SnarkSlope at March 16, 2009 12:01 PM

No- I jsut beloeive in housing that is not outsized for the community or the people who live in it, does not require huge amounts of energy to make it liveable and is built well to withstand the forces of time. There is a reason the term "McMansion" was invented- and I certainly didn't invent it. How many of those homes do you think were built to be ecologically sound or green? Instead, they are built specifically to be pretentious and overbearing. They were stuck in places that are now seeing half the development go empty and the occupied half emptying.

Maybe you should look up the meaning of "McMansion" before you presume to act like you know anything about me. It is not just a house that is larger than average. It's a paean to conspicuous consumption. Then maybe you would stop being such a pretentious and poor judge of character.

Posted by: bxgrl at March 16, 2009 12:06 PM

Snark- they are part of the New Brooklyn, not the Old Brooklyn :-)

Posted by: bxgrl at March 16, 2009 12:08 PM

I suppose the whole "McMansion to Brownstone vs Suburbia" thing is a bit out of wack too.

What did that NYTimes foreclosure map show? 95% of the foreclosures in something like 5 states (CA, FL, AZ and MI I think...)

So this "walking away" idea really only matter to a small handful of locales, I suppose, with the occasional individual in the rest of the country.

Posted by: christopher at March 16, 2009 12:17 PM

Are there any estimates of how many people might do this?

Posted by: bxgrl at March 16, 2009 12:19 PM

fsrq: Oh my. First of all, I am the one who came up with the McMansion example, so you should pick this fight with me. I recently came back from an exile out in suburbia, and I can tell you without qualification that there is class of housing, commonly known as "McMansions", that consists of recently constructed, poorly built, massive new homes that focus almost entirely on size and sheer volume of amenitites regardless of quality, on lots that are much smaller than one would expect for houses of such size. They are, architectually and aesthetically, total fucking garbage. They are the residential equivalent of cheap plastic toys from China. There is a fraction of the quality and a large multiple of the quantity of their more traditional counterparts.

Posted by: lechacal at March 16, 2009 12:23 PM

http://www.msnbc.msn.com/id/29669640/

"The most important reason: You signed a contract, took the money and promised to pay the lender back. That’s what the law now requires you to do. If we all got to decide which bills we wanted to pay, we wouldn’t have a functioning economy for very long."

Posted by: East New York at March 16, 2009 12:24 PM

"I'm curious how these new condos, despite being in brownstone Brooklyn, are not "part" of brownstone Brooklyn".

A simple enough distinction SnarkSlope for us old farts who were part of the original"brownstone revival" and would never want to live in a new house, despite it's obvious practicality. You [or fsrg] might label it snobbery--I just call it eccentricity :-)

Posted by: Bob Marvin at March 16, 2009 12:35 PM

bxgrl - you should learn about history - lets take what you said:

"How many of those homes[McMansions] do you think were built to be ecologically sound or green?"

And Brownstones are "green" - other than the fact that they are attached there is NOTHING "green" about a brownstone

"Instead, they are built specifically to be pretentious and overbearing."

You mean EXACTLY like the Brownstones were built - and btw if you think that there is no vanity or pretension in most peoples buying a multi-million dollar Brownstone then you are very naive

"They were stuck in places that are now seeing half the development go empty and the occupied half emptying."

Again - you mean like when after the Brownstone boom much of these structures were turned into apartment flats, and then after even more declined a sizeable portion were abandoned - and still are in many many cities in this country and even a few here in NYC.

Being a housing "snob" is really not the worst insult in the world - but not being able to recognize how your own biases and prejudice can improperly shape your view certainly is a major liability.

Posted by: fsrg at March 16, 2009 12:39 PM

lechacal - I am not picking a fight with anyone.....I am just pointing out the sillyness and folly of labeling a whole class of housing = stupid.

Even if I think a family of 4 living in a 10,000sq ft house as "stupid" - it doesnt change the fact that others can (just as easily see) that paying 3x as much to live in a 'brownstone' that is 1/3 the size and has little to no outdoor space is just as "stupid".

The truth is that on an economic basis (which is what this thread was about) either can be equally as "stupid" or "genius" depending on your circumstance and timing.

As for the "quality" - this is entirely circumstantial and essentially useless for discussion. Some new housing is built well, some is built like crap, some Brownstones have been renovated well and some have been renovated poorly and some havent been renovated at all - and for Brownstones - all are 100+ years old. And anyone who has any experience and is honest will tell you that on average, the maintenance costs for a new home in the 1st 10yrs of ownership will be far less than for any 100+ year old building - no matter how dedicated the 19th century craftsman were who built it.

Posted by: fsrg at March 16, 2009 12:50 PM

fsrq- when you are more conversant on what "McMansion" refers to these days and you actually develop the intelligence or have educated yourself in psychology, then I will take your character assessments more seriously. If anyone needs to look in the mirror about improperly shaped views, that would be you. Arrogance doesn't look well on you.

As for "green." In case you have forgotten, the evironment was rather different in the days these buildings were put up and actually many older houses have features built in that enabled them to compensate for things like airconditioning in the days before there were such things.

And since were are discussing history, you might want to recall that most town and row houses wre built to be elegant and beautiful, and the aestetics of the day were a far cry from ours. So a fireplace as a norm would not have been a hole in the wall. YOu have no idea about form follwing function, do you? No comprehension about the inteplay of archtiecture, construction, design and environment- and therein is the real differnece between a McMansion (as properly defined by lechacal) and a Brooklyn Brownstone.

As far as being naive- there is a huge differnece between a McMansion gated community out in the sticks and an urban community going through changes. I won't bother to take the time to explain to you why- do your own reading.

And no- it isn't pretentious to buy a million dollar brownstone if you can afford it. It's pretentious to do an unnecessary gut rehab and put in such things as a $15,000 stove you never cook on to impress your friends.

Like I said before- try to use the proper terminology, and get better educated before you accuse people of being snobs or try to analyze them or debate points about which you obviously know little about.

Posted by: bxgrl at March 16, 2009 12:56 PM

Hey, what's with the self-satisfied McMansion bashing?

I shudder at them too, but wonder about the moralizing cast of much of the commentary here. Don't forget, the brownstone beauties lining the streets of Park Slope, etc., were pretty much the McMansions of their day -- self-conciously fancy, even grandiose, exurban houses in historicist styles built by developers for the upper-middle classes.

I bet if you went back to the archives you'd find plenty of (old money) tastemakers sneering at their vulgarity...

Brownstones are beautiful (and the ones still here by definition well-built), but the beauties lining the streets of Park Slope, etc., were pretty much the McMansions of their day — self-consciously "fancy" historicist housing built by developers for the burgeoning upper-middle class.

I'm not a historian, but it wouldn't surprise me if when you combed the archives

Posted by: tasteslikechicken at March 16, 2009 1:06 PM

Oops, sorry for garbled post above.
I hit "post" prematurely, but hopefully my point is clear enough.

Posted by: tasteslikechicken at March 16, 2009 1:12 PM

McMansions are a class by themselves. I have no problems with big beautiful houses- there are plenty out there. And yes- I'm sure the "Upper" classes did shudder at their supposed vulgarity. Buyt then again, have you seen a Gold Coast Mansion? No townhouse could ever match those in vulgarity.

But as an artist/designer I feel that there is a level of design sensibility we no longer express today. It isn't part of education any longer, it isn't part of our aesthetic, and we have lost most of the skills and abilities that went into constructing thise buildings. There is not 'ess is more in a McMansion. As lechacal said- its junk food and they are so distinctive in that respect the term McMansion was coined specifically for them. It is not used for just any large house.

Posted by: bxgrl at March 16, 2009 1:15 PM

Right, it's just used to describe large, grandiose houses that the person doing the describing doesn't like.

Plenty of people denounce recently built "McMansions" in, say, the Hamptons or Greenwich, but many/most of those are built using very high-end construction and are probably just as sturdy as the 1920s inner-suburb Georgian McMansion I grew up in or the 1880s Italianate McMansion in Park Slope I now occupy part of.

And I would argue that lots of those high-end contemporary McMansions are quite nice looking and thoughtfully designed, even if they are not to my taste or (needless to say) budget. And if they last another 100 years, they will probably be highly valued -- just as the big, grand show-offy houses of the last century that were sturdy and beautiful enough to be left standing today are valued.

The problem with a term like "McMansion" is it has no objective meaning. It's just meant to convey contempt. As evidenced by many of the posts above.

Posted by: tasteslikechicken at March 16, 2009 1:42 PM

oh please. Just because you don't understand the context, doesn't me the rest of us don't. Stop making the discussion into something it isn't.

Posted by: bxgrl at March 16, 2009 2:00 PM

Pardon- "doesn't mean"

rotten keyboard.

Posted by: bxgrl at March 16, 2009 2:05 PM

Ever see those commercials on tv for the work-at-home-part-time-and-make-gazillion-dollars scams? The ones where the people say, "I only work part time, and we were able to buy this house." In the background of a couple of those people is one of the largest, overdone, pretentious pieces of crap houses I've seen anywhere. It's got about 14 extensions with turrets, and is large enough for a batallion. That, to me, is the McMansion everyone is talking about.

That may well be the modern equivilent of some massive Queen Anne mansion somewhere. Fine. And speculative rows of identical brownstones are the grandparents of modern townhouse enclaves in suburbia. And? The difference may be of taste and materials, but also of expectations. While there are certainly lots of stories about wannabe robber barons who started their vanity mansions and never lived in them because they went bust, the majority of people who built their houses in the past did not pay as much on credit, did not hold mortgages as long, and had personal relationships with their bankers and lenders. You didn't have a house in Indiana with a mortgage from a company based in California, or Hong Kong.

With life today a series of impersonal transactions with entities we never meet, people we don't know, and never even shake hands with, there is no incentive to stick to a deal. Many people 100 years ago stayed with their employers or their businesses for life. Today, most people are loyal only to the largest pay package, and in turn, most companies will dump even the most loyal worker in a heartbeat.

It seems to me, that in the long run, for those for whom a house is first and foremost, a home, there is less likely a chance to cut and run. These are places in which much more than mere money has been invested. Barring only the worst
of circumstances beyond their control, these people will not walk away. This is true whether it is a 200year old stone farmhouse or a 2 year old new build.

I do think, also, that those who do invest in old homes, do so as much for the love of those homes as examples of solid craftsmanship and architectural beauty, and the desire to be stewards to something more than just mortar, bricks and wood. In spite of the costs of renovation and upkeep, a true old house lover's first thoughts are not how much can I sell this for in 5 years.

Posted by: Montrose Morris at March 16, 2009 2:14 PM

It is becoming clear to me that many posters don't know what a McMansion is. Do a quick google search if you have not actually laid eyes on any of these things before (or, like me, gone visited a great many of them with a realtor in the suburbs). A McMansion is not a mansion. It is a cheap plastic version of a mansion. A McMansion creates the temporary illusion of class. It will not last very long before falling apart, as owners of the first McMansions (from the 1980s) are finding out now. A few distinctions between McMansions and the real article:

- The real thing comes with land, and plenty of it. A McMansion is awkwardly placed on too small a lot. Ownership of open, unbuilt space is an immediate class identifier.

- The real thing is built to last as long as a brownstone (which is neither a mansion nor a McMansion by the way). A McMansion will fall apart relatively quickly.

- The real thing probably has a porch or other features that reduce gross indoor square footage but increase outdoor usability. McMansions invariably sacrifice aesthetic beauty and outdoor usability in favor of maximizing indoor square footage.

- A McMansion may have a few pathetic young trees in the yard that will take many years to reach meaningful size. This is because the McMansion was just built on an open lot. There is probably little or no shade in the yard (other than the shadow of the McMansion next door, which is quite close). The real article has plenty of shade in the yard and the rest of the property.

- A McMansion almost certainly has a huge flat screen TV in it somewhere. It may have even come with the house.

- The big SUV in the McMansion garage is almost certainly leased. Whatever the owner of the real article drives (or has driven) is owned outright.

- A McMansion probably has a "high end" kitchen with plenty of brand name appliances, and some realtor probably convinced him this adds long-term value. The owners of the real article may or may not cook for themselves, and even if they do they almost certainly wouldn't sell their house on the basis of the brand names of the appliances.

- The owner of the McMansion probably stretched himself to the maximum to buy. The owner of the real article did not.

- You can see the McMansion very clearly from the road. You probably cannot see the real thing at all, but if there is a view it is a partial one.

- The mansion sacrifices size for aesthetics. The McMansion sacrifices aesthetics for size.

- The McMansion owner has a motorboat in the driveway. The owner of the real thing has a sailboat somewhere. Only one of them borrowed to buy his boat. You know which one.

How's that for snobbery, fsrq?

Sincerely,
someone who is familiar with the real article

Posted by: lechacal at March 16, 2009 2:28 PM

Though I couldn't bear to read the entire thread, I think many of the descriptions of mcmansions could also have been used to apply to the streetcar suburubs and the rows of brownstones in their day. Those of you who have done radical renovations on their houses may have discovered (as I did) that developers over a hundred years ago also underbuilt some of their houses and placed them on small lots.

Posted by: Putnamdenizen at March 16, 2009 2:37 PM

Putnam: What's a suburub? Is that like a residential development in Vermont?

Posted by: lechacal at March 16, 2009 2:50 PM

lechacal - snobbery at its highest level - congrats:

-"A McMansion is awkwardly placed on too small a lot" - you mean like was done 90 years ago invirtually every "town" suburb in Nassau and Southern Westchester - like Garden City, Rockville Center, New Rochelle? - those McMansions are now considered 'classics'

-"The real thing is built to last as long as a brownstone" - The crappiest siding and sheetrocked box should last longer then true brownstones - a porous and crappy building material used because it was cheap, available and gave the appearance of wealth (sound familiar?)

-"McMansions invariably sacrifice aesthetic beauty and outdoor usability in favor of maximizing indoor square footage." - really? I have seen plenty of homes that anyone would consider a "McMansion" that has psuedo porches, verandas, gazeebos ,etc....

-"A McMansion may have a few pathetic young trees in the yard that will take many years to reach meaningful size." - and eventually they will be full size - so then will they no longer be McMansions in your eyes?

-"A McMansion almost certainly has a huge flat screen TV in it somewhere." - you mean like virtually every other house in America with a TV bought in the last 5 years? Now your against flat screen televisions???

-"The big SUV in the McMansion garage is almost certainly leased. Whatever the owner of the real article drives (or has driven) is owned outright." - really? maybe the owner of the vehicle has their own buisness and they know that economically it is MUCH more tax advantageous to lease then buy (or finance) a vehicle that will be used for any business purpose

-"The owners of the real article may or may not cook for themselves, and even if they do they almost certainly wouldn't sell their house on the basis of the brand names of the appliances." Yeah sure because I have seen alot of expensive Brownstones, mansions and other high end real estate that have Kitchenaid appliances.

-"The owner of the McMansion probably stretched himself to the maximum to buy. The owner of the real article did not." - you know this because......you've done an indepth study of the financial histories of people buying brownstones & historic mansions vs modern large opulent homes or just because your snobbery enjoys the use of stereotypes ot make you feel smarter?

etc, etc, etc

The reason why the term McMansion can have no real meaning is because other then the fact that it is generally built recently everything else is in the eye of the beholder and the fact that you cannot accept this makes you a snob of the highest order.

Posted by: fsrg at March 16, 2009 3:21 PM

fsrq: I love you too man.

Serisouly though, I suspect that almost everyone else understands perfectly well what I am saying, so there is absolutely nothing to be gained from continuing this debate. Perhaps we can discuss at Floyd NY on Thursday. Otherwise I will find it tiresome and pointless to try to engage you.

I would point out that very little of what I have said has had anything to do with brownstones.

Posted by: lechacal at March 16, 2009 3:34 PM

Fsrg: Touche. But I assumed Lechacal was kidding?

Interesting: Did a search for "McMansion" in NYT archive and the only places it's used are in editorials and op-ed pieces (which are generally anti-McMansion) or features. Almost never in news stories. (Obviously, I have too much time on my hands this afternoon.)

McMansion has about a stable a meaning as, say, "dump." Certainly descriptive and useful, but really conveys the speaker's (negative) judgment. No one calls a big house they find beautiful a McMansion. Again, we're in the eye of the beholder here...

Posted by: tasteslikechicken at March 16, 2009 3:36 PM

Nope, I wasn't kidding at all. Exaggerating and stereotyping more than I should just to get a rise out of fsrq, but definitely not kidding.

Posted by: lechacal at March 16, 2009 3:54 PM

I agree this is a pointless merry-go-round but I want to say that while I try not to be just b/c it can cloud judgment - a "snob" is far from the worst thing one can be called - in some ways it can be complimentary. So please do not take unneccessay offense

(I just think snobbery is of little use in making economic decisions like cutting and running from an underwater house)

Posted by: fsrg at March 16, 2009 4:03 PM

Cease fire then. We can come out of our trenches and play soccer on Thursday.

Posted by: lechacal at March 16, 2009 4:09 PM

It's best to bail. Your lifestyle will all of a sudden become much cheaper. You would need 7 to 10 years, the time it would take for your walk-away to disappear from your credit anyway, to save again.

***Bid half off peak comps***

Posted by: Brownstones Half Off at March 16, 2009 11:17 PM

Yes walk away there are too many vultures just waiting to buy your home and that og your neighbors for a song. Most of you homebuyers thought you were so smart and we renters so stupid for not buying before. Well now don't expect any sympothy or money for that matter. I am so angry with homeowners now it is not even funny. You bleed the nation and now you still want more money. When is it going to end?

Posted by: hannible at March 17, 2009 9:30 AM

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